Jacqueline Rabe Thomas
Senate Minority Leader Len Fasano, R- North Haven, called an impromptu press conference Monday to demand Democratic leaders in the senate and the governor’s office show their hand about whether they have the votes to pass a transportation bill that includes tolls on trucks.
“They need to stop pretending they can pull a deal off because they can’t,” Fasano said. “Its been talked about forever and we are no step closer to resolving this issue to the detriment of businesses and the state of Connecticut. … They had their shot. They tried the best they could. They can’t get there.”
Gov. Ned Lamont’s push to get the General Assembly’s approval for tolls began last January, but has failed to be called for a vote since then. When the legislative session ended last spring, the administration aimed to generate support over the summer and bring it across the finish line during the fall, after municipal elections. That goal has been pushed back month after month, and the administration is now aiming for a vote before the legislative session begins Feb. 5.
But that window is closing. No vote is scheduled this week and legislators have not been told to reserve a date to come in for a vote.
Fasano says that’s because the votes are not there.
“You are running out of time,” said Fasano. “We all know the truth: these guys are never going to do tolls in regular session.”
Last week, Senate Democrats met privately to discuss whether they had enough votes to approve tolls. Senate President Pro Tem Martin M. Looney, D-New Haven, said at the time that members of his caucus had a significant list of questions and conditions that must be addressed before he can assure the 18 votes necessary for passage in the Senate.
“We have a contingent consensus of 18 members who have not rejected the concept of a bill to toll trucks on bridges only,” Looney said. On Monday, a spokesman for the Senate Democrats said nothing has changed.
“When Senator Looney said the Senate Democratic caucus had a contingent consensus of 18 votes on a transportation plan with tolling only on large trucks with four axels or more, he meant it. We would appreciate if Senator Fasano would stick to leading his 14 member caucus,” said Kevin Coughlin.Lamont told reporters following an unrelated press conference in Derby that he believes those issues have been taken care of.
“We’ve taken care of those issues,” he said. “What I really want is the legislature to vote. And If its not this week, I really hope it’s next week. This is an issue that has festered for many, many years. It’s time for us to fix our transportation system. … We have given the legislature a draft of the bill that meets all of our requirements. They’vge agreed to the basic parameters of it. Now it’s up to them to finalize the final drafting of that and get it to their members as soon as possible.”
Lamont said his staff is working with legislative leaders to get a vote scheduled.
$1M sought to embark on plan to remake Stamford school buildings
She predicts total domestic transportation construction and related-market activity in 2020 should reach $300.4 billion, up from 2019's $286.5 billion, after adjusting for project costs and inflation. The transportation construction market grew by 8 percent in 2019, the result of gains in highway, street and pavement work, which grew by $9.6 billion, according to Black. Airport construction work on runways and terminals increased by less than 1 percent in 2019 but was still at record investment levels. Likewise, strong growth in the subway, light rail, and mass transit sector, as well as private railroad investment helped support a strong year for transportation construction activity.
Overall, transportation construction market activity is expected to increase or be steady in about half of the states, according to the ARTBA report. Some of the largest markets, expected to remain stable or grow, include Texas, California, Illinois, New York, Florida, North Carolina, Washington, Minnesota, Michigan, Arizona and Wisconsin.
The report also noted that the real value of public highway, street and related construction investment by state transportation departments and local governments — the largest market sector — is expected to increase by 6 percent to $77.5 billion after growing 15 percent in 2019. Construction work on private highways, bridges, parking lots and driveways will increase from $69.1 billion in 2019 to $71.8 billion in 2020 and will continue to grow over the next five years as market activity increases in those sectors. The pace of bridge and tunnel construction work stayed flat in 2019 and is forecast to grow by $800 million, or 3 percent, in 2020. Bridge and tunnel market activity fell slightly from $28.8 billion in 2018 to $28.6 billion in 2019, after adjusting for project costs and inflation.
Public transit and rail construction are expected to grow to $24.2 billion in 2020, a 5 percent increase. Subway and light rail investment are expected to reach a new record level, increasing to $11 billion. Airport terminal and related construction work, including structures like parking garages, hangars, air freight terminals, and traffic towers, is estimated to increase to $19.6 billion. Runway work is forecasted to increase to $4.9 billion in 2020.
Simonson of AGC also believes the renewable power market is healthy.
"The market's condition reflects state mandates and technological progress, making wind and solar more competitive with gas (and coal and nuclear) power generation." And he noted that "pipelines are being built to catch up with oil and gas produced by fracking, but timing of projects depends on regulatory and court decisions."
Equipment Sales Picture
Investment in construction machinery pulled back 6.7 percent in Q3 of 2019, but rose 4 percent from a year ago, according to ELFF. The Construction Machinery Momentum Index decreased from 92.3 in November to 90.8 in December. New privately-owned houses surged 15 percent in October, the fastest growth since late 2017, while the Consumer Sentiment Index improved 1.3 points in November. Overall, the Index points to modest growth in construction machinery investment growth over the next two quarters, reports the equipment-leasing organization.
However, investment in material handling equipment grew at an 11 percent rate in Q3 of 2019, and is essentially flat year-over-year. The Materials Handling Equipment Momentum Index improved from 79.1 in November to 81.2 in December, though it remains weak by historical standards. In October, materials handling equipment imports pulled back 2.6 percent, the seventh decline this year, while industrial production fell 0.8 percent. Overall, the Index's recent movement points to a potential improvement in materials handling equipment investment growth over the next two quarters, according to the ELFF outlook.
ELFF noted Investment in all other industrial equipment increased at a 4.5 percent annualized rate in Q3 of 2019, and is up 4.3 percent from one year ago. This category's index increased from 94.3 in November to 95.7 in December, the strongest reading since mid-2018. In October, the M1 Money Supply increased 0.8 percent, while manufacturing employment increased 0.4 percent in November, the strongest growth in over two decades. Overall, the Index signals continued moderate growth in other industrial equipment investment over the next two quarters.
Rouse's October 2019 issue of The Equipment Report shows values through the third quarter of 2019 for general construction and heavy earthmoving equipment have exhibited some bright signs. According to the construction market intelligence provider, heavy earthmoving products were the first to be impacted, showing a downward pressure on excavator values and to a lesser extent dozers and wheel loaders. As the year has progressed, similar patterns have appeared across general construction products, but aerial equipment, telehandlers, and light and medium earth moving equipment are most affected. This abatement tails very strong results in 2018, when the market peaked for many products.
In addition to weaker prices for used equipment, Rouse reported a "notable" spike in volumes of construction cranes coming for sale into the auction channel. There has been a continual stable pattern for lower tonnage rough-terrain, truck-mounted, and carry-deck cranes. Higher tonnage all-terrain and crawler cranes are decelerating, but still have slightly soft value trajectory. North American auction figures indicate a potentially challenging future environment for mobile cranes, but whether these sales patterns will persist remains to be seen, according to the report.
"The overall market is cautiously stable relative to the period of sharp declines in 2016-17. As commercial construction project work drives tower demand, the OLV index for tower cranes in 2019 continues to reflect an upward trend in used equipment values. The latest OEM reports show increasing revenues year over year, but these figures were coming off the lows of 2016 and 2017. Looking forward, OEM's have commented on a softening demand landscape as North American and European construction has slowed, and the uncertainty of future market conditions has tempered the economic outlook," stated the October Rouse report.
Labor and Other Issues
Asked if employee workforce numbers will meet the construction industry's needs next year, AGC's Simonson responded with a firm ‘No.' Citing the 2020 AGC of America-Safe Construction Outlook Survey, released at press time, he noted that "three-fourths of survey respondents expect to add employees in 2020. However, four-fifths of the firms said they are having a hard time filling positions, and two-thirds think it will be as hard or harder to fill positions in the coming 12 months."
While contractors are optimistic about demand for construction in 2020, many executives are troubled by labor shortages and the impacts shortages are having on operations, training, and safety programs, said Stephen E. Sandherr, the association's CEO. "At the same time, many construction executives are troubled by labor shortages and the impacts those shortages are having on operations, training and safety programs, and bottom lines."
Most contractors plan to add staff in 2020 to keep pace with growing demand, just over half report their expansion plans will only increase the size of their firm by 10 percent or less. About one-fifth of respondents plan to increase headcount by 11 to 25 percent, and only 5 percent plan to increase employment by more than 25 percent. Despite plans to expand headcount, 81 percent report having a hard time filling salaried and hourly craft positions. In addition, 43 percent expect the challenge to hire will continue in the next 12 months, and 22 percent expect that it will become harder to hire in 2020.
"Firms are adopting a variety of approaches to replace workers or allow for use of workers with less experience or training than before," Simonson stated in survey results. In fact, he noted that 32 percent of respondents report their firms are investing in labor-saving equipment, while 28 percent are using methods to reduce onsite worktime. He reported on two other issues affecting the health of the construction industry in 2020.
"Two worries have subsided for now but could pop up again," said Simonson. "If interest rates increase as steeply and quickly as they declined in the fall of 2019, there could be a cutback in homebuilding, developer-financed projects and state and local bond funding for schools and infrastructure."
He also believes that "trade frictions appear to have calmed down for now, but could flare up again. In that case, contractors might be hit directly by tariff costs on materials and equipment and could also see manufacturing, logistics, and transportation facilities put on hold or cancelled."
Benjamin Duyck, the director of market intelligence of Association of Equipment Manufacturers, shared his perspective on the industrial economic outlook during the association's Thinking Forward event, held in November. He believes the construction industry's collective question is whether or not a recession is imminent. Though Duyck sees no reason to suggest an economic slowdown is on the way, he said economic indicators lead him to believe it could happen in 2021.
"While we have a strong labor market and consumer spending, the biggest impediment to the market right now is the fear that consumer confidence might deteriorate," said Duyck.
The consensus right now, according to AEM, is that because of the inversion of yield curves widely considered a decent indicator a recession could be on the horizon 12 to 18 months into the future.
He believes "steady and solid growth is likely to continue for the construction sector," with residential construction still in the driver's seat. However, as of late, growth has slowed considerably. Tariffs are playing a role in the uncertainty, as is the need for a new comprehensive infrastructure package.
"Both political parties discuss this quite a bit, but nothing has materialized so far," said Duyck. "It's now expected for 2021 — and hopefully it comes soon, as most of the infrastructure spending we see today occurs at the state and local level."
Fasano Says Democrats Don’t Have Votes For Truck-Only Toll Plan
Christine Stuart
HARTFORD, CT – Senate Republican Leader Len Fasano made his way to the state Capitol press room Monday to announce the lack of a consensus on a transportation plan that includes truck-only tolls.
“They need to stop pretending they can pull a deal off because they can’t,” Fasano said. Last week, following a closed-door caucus, Senate President Martin Looney, D-New Haven, said 18 of his 22 members have “not rejected the concept of a bill to toll trucks on bridges only.” However, their votes were contingent on certain changes being made to the draft legislation.
It’s unclear if those changes have been made since the final legislation is not publicly available.
A spokesman for the Democratic caucus dismissed Fasano’s comments.
“Senate Democrats have a policy not to speculate publicly on the inner workings and vote counts of Senate Republicans,” said Kevin Coughlin, a spokesman for the Senate Democrats. “When Senator Looney said the Senate Democratic caucus had a contingent consensus of 18 votes on a transportation plan with tolling only on large trucks with four axels or more, he meant it. We would appreciate if Senator Fasano would stick to leading his 14 member caucus.”
At an unrelated event in Derby on Monday, Lamont said he wants the legislature to vote.
“This is an issue that’s festered for many, many years,” Lamont said. “It’s time for us to fix our transportation.”
Fasano said Lamont is trying to find the “lowest common denominator to get people to vote for a toll bill and he just can’t get there.”
“This is what we were able to negotiate with the legislature and it gets the job done,” Lamont said of his proposal.
He said the difference between the Senate Republican plan and the Democratic proposal, which gets 1% of the revenue from truck tolls, is $300 million.
Fasano said it’s time for them to move forward. He said Democrats had their shot, and now it’s time to consider the Senate Republicans plan dubbed FASTR CT.
Fasano said the deal Senate Democrats were briefed on last week is not the current deal. He said he’s seen no draft legislation, but based on news reports enough may have been changed to cause senators to change their vote.
“I think they’re further apart and not closer together,” Fasano said.
He said no matter how many variables of tolls they try, it “comes down to trust, and you just can’t fix trust.”
No vote has been scheduled yet and the regular legislative session starts on Feb. 5.Fasano said if they don’t vote on this by the end of the month, he doesn’t believe they will raise the bill during the regular legislative session.
Max Reiss, Lamont’s communications director, didn’t hold back on what he thought of Fasano’s comments.
“After walking away from his reckless proposal that lacked support, this is an odd and desperate attempt by Senator Fasano to re-join the transportation conversation,” Reiss said. “What the Lamont administration has proposed, with Senate and House Democrats, is the only plan that creates a 10-year, recession-proof jobs program that will also reduce greenhouse gas emissions through the right investments in public transit and give more Connecticut residents time at home – all while helping to grow the state’s economy.”
He said Fasano knows that because he’s spent more time with the Lamont administration than with his own caucus on this issue.
“The support is there for CT 2030 – where it isn’t, is for the Senator’s dangerous plan to loot Connecticut’s Rainy Day Fund, leading to tax increases on Connecticut residents, and funding cuts for municipal aid and education during the next recession,” Reiss said. “We are actively working with House and Senate Democratic leadership on a date to vote on this plan, which we know will get Connecticut’s economy moving again.”